In the past, home buyers who have wanted to purchase in declining markets were penalized for doing so. Usually, lenders required more funds for a down payment, some up to 5% more than homes bought in regular markets. Local lenders held the power to call an area “declining” so any buyer could find themselves paying more, even when local areas were doing well.

Sound unfair? Well, it is.

Thankfully, someone has finally figured this out, and surprisingly, it is Fannie Mae and Freddie Mac. Now, buyers will pay the same amount for down payments, no matter where the property is located. Both factions have suspended their loan penalties indefinitely.

Now there are still many lenders out there that refuse to lift their penalties, but if the loan if backed by Fannie Mae or Freddie Mace, relief is available now. For heaven’s sake, how can you get a market out of decline if you make it harder for low income families to purchase a home?

By the way, buyers can also get funding through FHA which also does not have a declining market penalty for home purchases.